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Pixy, et. al.;

My friend, age 65 is retiring with a 401(k) of about $100,000. He has indicated an interest in converting his funds to a Roth IRA. Tax bracket is 15% Federal and 8.2% State (no local). I'm ok on the mechanics of such a move, but I have a real problem recognizing the benefits of converting at that age.

One question is the five year holding period for non-penalty withdrawals. I assume it applies, even though he is 65.

The other question is, does the economic benefit of future tax-free withdrawals make sens when the future is now? If my calculations are correct, his break even is about his life expectancy. Your thoughts?
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